A total of 3,400 international flights were operated to/from Iranian airports during the first two months of the current Iranian year (started March 21), registering a 183% rise compared with last year’s corresponding period, according to the Ministry of Roads and Urban Development.
The number of takeoffs and landings stood at 48,000 for domestic flights during the same period, indicating a 1% year-on-year rise.
The significant rise in the number of passengers on domestic routes followed the lifting of restrictions related to Covid-19, as airlines were required to enforce social distancing during flights at the time of the pandemic.
The ministry put the number of passengers on domestic flights at 5,376,000 and on international flights at 411,000 during the period, saying the numbers show a 51% and 378% year-on-year rise respectively.
A total of 39,000 foreign flights crossed Iran’s airspace during the period, indicating an 81% growth compared with last year’s corresponding period, the ministry reported on its website.
Data released earlier by Iran Airports Company show Tehran's Mehrabad International Airport accounted for 2.11 million of the total number of passengers moved internally (5,376,000), 50% more than in the corresponding period of last year.
Mashhad International Airport and Shiraz International Airport followed with 961,608 and 392,907 passengers respectively.
Mehrabad handled 18,457 landings and takeoffs during the period, considerably higher than other Iranian airports.
The IAC data do not include figures from Tehran's Imam Khomeini International Airport, which account for the largest number of international flights operated to/from Iran.
IATA on Global Outlook
The International Air Transport Association (IATA) recently announced an upgrade to its outlook for the airline industry’s 2022 financial performance, as the pace of recovery from the Covid-19 crisis quickens. Forecast highlights include:
Industry losses are expected to reduce to -$9.7 billion (improved from the October 2021 forecast for an $11.6 billion loss) for a net loss margin of -1.2%. That is a huge improvement from losses of $137.7 billion (-36.0% net margin) in 2020 and $42.1 billion (-8.3% net margin) in 2021.
Industry-wide profitability in 2023 appears within reach with North America already expected to deliver an $8.8 billion profit in 2022.
Efficiency gains and improving yields are helping airlines to reduce losses even with rising labor and fuel costs (the latter driven by a +40% increase in the world oil price and a widening crack spread this year).
Industry optimism and commitment to emissions reductions are evident in the expected net delivery of over 1,200 aircraft in 2022.
Strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fueling a resurgence in demand that will see passenger numbers reach 83% of pre-pandemic levels in 2022.
Despite economic challenges, cargo volumes are expected to set a record high of 68.4 million tons in 2022.
“Airlines are resilient. People are flying in ever greater numbers. And cargo is performing well against a backdrop of growing economic uncertainty. Losses will be cut to $9.7 billion this year and profitability is on the horizon for 2023. It is a time for optimism, even if there are still challenges on costs, particularly fuel, and some lingering restrictions in a few key markets,” said Willie Walsh, IATA’s Director General.
Revenues are rising as Covid-19 restrictions ease and people return to travel. The challenge for 2022 is to keep costs under control.
“The reduction in losses is the result of hard work to keep costs under control as the industry ramps up. The improvement in the financial outlook comes from holding costs to a 44% increase while revenues increased by 55%. As the industry returns to more normal levels of production and with high fuel costs likely to stay for a while, profitability will depend on continued cost control. And that encompasses the value chain. Our suppliers, including airports and air navigation service providers, need to be as focused on controlling costs as their customers to support the industry’s recovery,” said Walsh.
Iran’s Aging Fleet
According to the Association of Iranian Airlines, the country has 333 airplanes at its disposal, more than half of which are grounded.
Players of the aviation industry estimate that planes grounded at airports account for between 50% and 70% of Iran’s total air fleet.
In an article published by Shargh newspaper, Hamid Ghavabesh, former head of the Iranian Airlines Association, put the number of operating aircraft at 157.
Arman Bayat, an aviation industry analyst, told the Persian economic daily Donya-e-Eqtesad that the number of operational aircraft was 148. It can be said that 44-47% of Iran's commercial aircraft is operational and 60% of them are considered grounded.
“Note that operational planes are not capable of flying for a long time; many of these planes fly only twice and the total efficiency of Iranian planes is between three and four hours; sometimes they are incapable of flying after one roundtrip flight,” Ghavabesh said.
“This comes as the young planes of Iran's neighboring airlines, such as the airlines of Arab countries and Turkey, are able to fly for a full day.”
The former head of the Iranian Airlines Association added that the average age of planes in the Arab countries and Turkey is five to six years whereas the average age of Iranian aircraft is estimated at 28 years; some older aircraft are among Iran’s air fleet as well.
“Except for the limited number of planes purchased after the conclusion of the Joint Comprehensive Plan of Action [aka Iran nuclear deal], there is no new aircraft in the Iranian air fleet,” he said.
Fifteen planes were purchased after JCPOA, 13 of which were small ones manufactured by ATR Aircraft. In other words, only 4.5% of Iranian aircraft are new.
Low productivity and frequent repairs of Iran’s old planes have increased the prices of air tickets; the operation of small airlines is not economically feasible, pushing some of them to the brink of bankruptcy. They are renting or selling their old aircraft to other larger airlines.
“Supplying parts is very expensive,” Ghavabesh said.
“Purchasing aircraft parts under sanctions at times imposes a 30% higher cost on airlines. In the meantime, some aircraft part dealers take advantage of sanctions and sell substandard parts to Iranian airlines, which raise the risks of air transportation in the country.”
Expensive air tickets have made headlines many times. Domestic airfares sometimes cost half of the minimum wage of Iranian workers. In addition to expensive tickets and shortages of planes during peak season, most Iranian airlines have now eliminated passenger catering services to save on costs.
According to Hormatollah Rafiei, the head of Travel Agents Guild Association, it is illegal for Iranian airlines to eliminate passenger catering services but there are flights operated by foreign airlines during which catering services are not provided; these flights are cheap and economical, and passengers know from the beginning that the costs of catering have been deducted from ticket price.
All Iranian airlines, without exception, receive catering fees from passengers and this fee is calculated in the price of ticket but under the pretext of Covid-19, they avoid giving catering services.
Rafiei noted that the poor economic situation has reduced the travel rate of Iranians by 50% this year compared to pre-Covid years.
Iranian airlines have been forced to restrict their flights on some foreign and domestic routes, including Ahvaz and Shiraz. The decline in passenger purchasing power, along with the high maintenance costs of air fleet and its low productivity, has now put the Iranian aviation industry on a loss-making path.
